Sharewatch: Carlton And Granada Surge On Merger Decision

Carlton and Granada were seen in focus yesterday, up 12.95% and 8.95% respectively after the Competition Commission cleared the way for their planned their £4 billion merger (see ITV Cleared To Merge With Sales Houses Intact)

The news was greeted with optimism in the city and Morgan Stanley has increased its price target on Carlton to 152p and on Granada to 86p, assuming £60 million of synergies per annum from 2005 onwards (see Carlton And Granada See Shares Rise As City Backs Merger).

However, analysts at Merrill Lynch have warned there may well be a sting in the Competition Commission’s tail after it called for a review of the overall market for airtime sales amid concerns over potential abuses.

Approval for the merger also boosted SMG, which was seen up 12.82% and Ulster TV, which was up 3.32% on speculation the united ITV may move to acquire the ITV franchises that it does not already own.

Broader market sentiment was mixed yesterday, following renewed strength in the Euro, which closed at record levels yesterday.

The closing prices of media company shares on Tuesday were: